How to meet the challenges of pet food distribution
Surging demand for pet food worldwide obliges companies to plan ahead. Here, an expert in the supply chain field describes the best approaches to adopt to ensure product is distributed efficiently.
The high demand for pet food is putting more pressure on the supply chain, as pet food distribution presents a unique set of challenges that requires careful consideration and strategic planning. Among these challenges, 3 main areas stand out: order consolidation, distribution network design and regulatory compliance.
Order consolidation = clever combinations
Consolidation is the process of shipping a number of individual orders at the same time. Shipments going to the same destination are grouped and shipped together to save costs and time. This is tricky in the world of pet food distribution, as these are products that can vary significantly in terms of size, packaging and type.
For instance, supply chain consultants Alpine recently worked with a pet food retailer that had a range of bulk dry goods, smaller non-food items and a growing number of products that required refrigeration.
When it came to order consolidation, there was a lot to consider to ensure that each store received its orders efficiently, accurately and without any damage.
On the inbound side, the retailer often received palletized products from its manufacturers. It then had to break those down and rebuild outbound shipments that packed everything into new mixed orders, all without damaging any goods.
Fine-tuned solutions
To get this exactly right, many pet food retailers are benefiting from consultants that employ sophisticated slotting tools. These yield-specific solutions maximize picking productivity, minimize forward pick replenishments, create like-item separation, minimize in-transit damage and focus on employee ergonomics.
Distribution network design analysis
Network design plays a crucial role in the efficiency and effectiveness of pet food distribution. Deciding on the location and number of distribution centers is critical to minimizing transportation costs and ensuring timely delivery to customers.
A growing number of Alpine customers have benefited from a Distribution Network Analysis (DNA). This is an exercise that analyzes extensive customer data to determine the ideal size, location and number of distribution centers required to meet customer service levels and order delivery cycles.
Examples of data examined during the DNA exercise are real estate costs for each proposed location, average wages for warehouse employees at each location and shipping cost reductions. Return-on-investment projections are included as part of the process, and it’s not abnormal for millions of dollars in savings to be identified.
A recent project yielded a range of recommendations capable of generating annual savings of at least $6 million (€5.6M) with modest changes, to as much as $24 million (€22.2M) with a complete network overhaul.
Keeping up with regulation
As demand for pet food continues to increase, different types of pet food products – particularly premium – are proliferating. So regulatory compliance requirements, pet food recalls and reputational risk for both manufacturers and retailers are factors that are unlikely to go away. Different pet food products may be subject to various regulations and quality control standards imposed by regulatory agencies.
Ensuring compliance with these standards and handling any necessary documentation is crucial for avoiding legal issues and maintaining customer trust.
Distributors must stay informed about evolving regulatory requirements and implement processes to ensure that all products meet the necessary standards before being distributed to customers.
Prompt action required
In the event of a product recall or quality issue, a Warehouse Management System (WMS) can provide accurate and timely traceability information. It allows businesses to identify affected products and take appropriate action promptly. If you handle pet food and you’re evaluating WMS software, it’s vital that you ask vendors to demonstrate how the solution handles recalls. They don’t all work in the same way when it comes to this task.
Additional factors
In addition to the 3 most common challenges, the pet food distribution industry faces external pressures that can further complicate matters.
Price increases in the supply chain – driven by factors such as rising transportation costs, raw material shortages and inflation – can impact all aspects of distribution. Higher prices for ingredients and packaging materials can also affect production costs, ultimately leading to higher prices for consumers. Distributors must carefully manage these cost increases to maintain profitability while remaining competitive in the market.
Geopolitical pressures can also have a significant impact on pet food distribution. Trade disputes, tariffs and political instability in key regions can disrupt supply chains and affect the availability of certain products. Distributors may need to adapt their distribution networks and sourcing strategies to navigate geopolitical challenges and ensure a steady supply of pet food products to meet customer demand.
Pet food distributors must address all these internal and external challenges to ensure efficient and reliable distribution while meeting customer demands and industry standards.
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